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Page added on July 10, 2015

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In California, Big Oil Finds Water Is Its Most Prized Commodity

Business

California’s epic drought is pushing Big Oil to solve a problem it’s struggled with for decades: what to do with the billions of gallons of wastewater that gush out of wells every year.

Golden State drillers have pumped much of that liquid back underground into disposal wells. Now, amid a four-year dry spell, more companies are looking to recycle their water or sell it to parched farms as the industry tries to get ahead of environmental lawsuits and new regulations.

The trend could have implications for oil patches across the country. With fracking boosting the industry’s thirst for water, companies have run into conflicts from Texas to Colorado to Pennsylvania. California could be an incubator for conservation efforts that have so far failed to gain traction elsewhere in the U.S.

Drillers may have little choice. The state’s 50,000 disposal wells have come under increased scrutiny this year, after regulators said they’d mistakenly allowed companies to inject wastewater near underground drinking supplies. Environmental groups sued the state to stop the practice at 2,500 sites considered most sensitive.

A win for environmentalists could drive up disposal prices and delay drilling by months for Chevron Corp., Linn Energy LLC and other companies, according to a June 12 report by Bloomberg Intelligence analysts Brandon Barnes and Matthew Kerner.

Conservation Rising

Conservation is “suddenly leaping to the forefront,” said Laura Capper, founder of Houston-based CAP Resources, which advises the industry on water use. “You’re going to see a lot of retrofit programs. If they’re not already recycling, they’ll be adapting.”

Sarah Nordin, a spokeswoman at Linn, didn’t immediately return messages seeking comment on the lawsuit. Cam Van Ast, a Chevron spokesman, declined to discuss it.

In central California’s San Joaquin Valley, Chevron piped almost 8 billion gallons of treated wastewater to almond and pistachio farmers last year. California Resources Corp., the state’s biggest oil producer, plans to quadruple the water it sells to growers, Chief Executive Officer Todd Stevens told investors at an April conference.

An environmental group, Water Defense, questioned whether Chevron’s sales to farmers created the risk of industrial chemicals contaminating the food chain. The local water-quality control board ordered the company to conduct tests and Chevron says it has met all the pollution standards in its permit.

Water Flow

One of the industry’s biggest headaches is what to do with the torrents of naturally occurring “produced water” that come out of wells along with oil and gas. Members of the Western States Petroleum Association, a group of major drillers including Chevron and CRC, will unearth more than 92 billion gallons of wastewater this year, based on a May survey by the association.

The water’s typically too salty to be potable, although in parts of the state it can be treated enough for use by farmers. The vast majority of the waste is either reused for drilling or injected into disposal wells.

That may change thanks to businesses such as OriginClear Inc., a Los Angeles-based licensor of technology that purifies wastewater by zapping it with electric pulses. OriginClear has run pilot projects for both CRC and natural-gas producer Aera Energy LLC, William Charneski, OriginClear’s senior vice president, said in a Dallas interview.

Other companies are using technologies developed to treat petroleum-contaminated land to better cleanse their wastewater, said Barnes, the Bloomberg Intelligence analyst.

More Recycling

If California eventually mandates re-use of water at the well, it could energize recycling across the oil industry with other state legislatures following suit, said Chris Robart, a managing director at market-research company IHS Inc. of Englewood, Colorado.

One lesson emerging from oilfields: Operators don’t need to use expensive cleaning techniques to make wastewater suitable for drilling. Instead, less extensive but cheaper treatment is proving good enough, an insight that could help the practice take off elsewhere, Robart said.

“It’s cut out the whole high-end portion of the market,” he said. “They don’t need fancy technology. You need tried-and- true and simple and cheap.”

North of Santa Barbara, Santa Maria Energy LLC has won approval for an $8 million pipeline connecting its oilfields to a local sewage treatment plant. The company will use treated effluent from the plant in drilling operations.

Capper, the Houston consultant, has been hired to boost water recycling in one company’s fields from 20 percent to as much as 90, she said.

“I don’t think they have any choice but to recycle,” she said. “It’s the right thing to do.”

RIGZONE



26 Comments on "In California, Big Oil Finds Water Is Its Most Prized Commodity"

  1. Dredd on Fri, 10th Jul 2015 11:19 am 

    How is the California lawsuit against big oil and Jerry Brown going (On The Origin of “Conspiracy Theory” – 6)?

  2. Dredd on Fri, 10th Jul 2015 11:22 am 

    There may be some new lawsuits in the wake of:

    Internal fossil fuel industry memos reveal decades of disinformation — a deliberate campaign to deceive the public that continues even today.

    For nearly three decades, many of the world’s largest fossil fuel companies have knowingly worked to deceive the public about the realities and risks of climate change.

    Their deceptive tactics are now highlighted in this set of seven “deception dossiers”—collections of internal company and trade association documents that have either been leaked to the public, come to light through lawsuits, or been disclosed through Freedom of Information (FOIA) requests.

    Each collection provides an illuminating inside look at this coordinated campaign of deception, an effort underwritten by ExxonMobil, Chevron, ConocoPhillips, BP, Shell, Peabody Energy, and other members of the fossil fuel industry.

    (The Criminally Insane Epoch Arises – 4).

    Sue the bastids.

  3. Plantagenet on Fri, 10th Jul 2015 11:41 am 

    Jerry Brown and Ds have put NO LIMITS on the amount of water that California’s oil and gas industry uses, even as California deals with the worst drought in history.

    I thought Ds supposedly cared about the environment and about global warming. In California, not so much.

  4. shortonoil on Fri, 10th Jul 2015 11:58 am 

    With WTI at $53/ barrel the water is more valuable than the oil! How much longer the shale industry can keep up the charade is the real question? These companies keep piling on debt at $50 prices when they couldn’t make money at $100.

    http://www.zerohedge.com/news/2015-07-10/oil-price-plunge-reignites-fears-indebted-shale-companies

    With prices in a long term downward trend, and no possibility of a reversal that wouldn’t completely bankrupt the entire economy, the shale industry is now playing the end game:

    http://www.thehillsgroup.org/depletion2_022.htm

    That waste water could be put to good use; they could use it to literally “hose” their investors!

  5. Plantagenet on Fri, 10th Jul 2015 12:13 pm 

    I hate to break it to you, short, but there is essentially NO shale driving in California.

    The water use issues in California all come from conventional oil fields.

  6. Plantagenet on Fri, 10th Jul 2015 12:14 pm 

    ooops—an autocorrect gone bad. Lets try again:

    I hate to break it to you, short, but there is essentially NO shale drilling in California.
    The water use issues in California all come from conventional oil fields.

    CHEERS!

  7. Northwest Resident on Fri, 10th Jul 2015 12:38 pm 

    “NO shale drilling in California.”

    That’s Plant-speak for “Look at me. I think I know it all. But really, I’m just a moron.”

    “In February 2015, Kern County water officials discovered hundreds of unlined fracking wastewater pits that were operating without permits. The Central Valley Regional Water Quality Control Board found that more than one-third of the region’s active disposal pits were operating without proper permits. The unlined pits raise concerns that groundwater could be contaminated in the area. The operators of these sites will not be shut down, but will have to apply for permits and monitor the sites if they are near water sources.”

    http://www.sourcewatch.org/index.php/California_and_fracking

    Just google “active California shale plays”. Read all about it.

  8. apneaman on Fri, 10th Jul 2015 1:25 pm 

    Water and wildlife may be at risk from fracking’s toxic chemicals, panel finds

    “Hydraulic fracturing uses a host of highly toxic chemicals — the impacts of which are for the most part unknown — that could be contaminating drinking water supplies, wildlife and crops, according to a report released Thursday by a California science panel.

    The long-awaited final assessment from the California Council on Science and Technology said that because of data gaps and inadequate state testing, overwhelmed regulatory agencies do not have a complete picture of what oil companies are doing.

    The risks and hazards associated with about two-thirds of the additives used in fracking are not clear, and the toxicity of more than half, the report concluded, remains “uninvestigated, unmeasured and unknown. Basic information about how these chemicals would move through the environment does not exist.”

    http://www.latimes.com/local/lanow/la-me-california-science-panel-warns-that-fracking-poses-unknown-risk-20150709-story.html

  9. MSN Fanboy on Fri, 10th Jul 2015 1:27 pm 

    K…0…. And Plant goes down!

  10. Northwest Resident on Fri, 10th Jul 2015 1:42 pm 

    Somebody just got the Glut beat out of him.

  11. Plantagenet on Fri, 10th Jul 2015 1:55 pm 

    @nrodent

    You are such a dope.

    Frack jobs are done on virtually all oil wells. Fracking has been part of the oil biz for almost a century.

    I repeat—- there isn’t a SHALE OIL industry in California. The oil biz there is based on CONVENTIONAL oil fields.

    Get it now?

    CHEERS!

  12. Plantagenet on Fri, 10th Jul 2015 2:00 pm 

    NPR is reporting that areas in California’s central valley are getting running water again, after months of doing without.

    Meanwhile, Jerry Brown and the Ca. Ds have kept the water running for the oil biz with no interruptions.

  13. joe on Fri, 10th Jul 2015 2:02 pm 

    As climate change continues, it seems prudent not only to ensure responsible industrial practices which can deliver both profit and sustainability. A good hunter knows that only through preserving the environment can he continue to enjoy killing things living in it.

  14. apneaman on Fri, 10th Jul 2015 2:06 pm 

    Planty, what do they mean by the Monterey shale?

  15. apneaman on Fri, 10th Jul 2015 2:14 pm 

    Planty no tight oil at all in California? Zero zippo zilch?

  16. Northwest Resident on Fri, 10th Jul 2015 2:35 pm 

    Plant — Yeah, no shale plays in California currently being drilled. I know. I just couldn’t resist the opportunity to give such a pompous asshole as you are a swift kick in the nuts (or whatever you have down there) to see how you react. I had a few boring minutes on my hands. Your response is exactly what I expected and hoped to see. You passed the test, this time.

  17. Pops on Fri, 10th Jul 2015 2:46 pm 

    Though I hate to take Plant’s side on anything, the article specifies
    https://en.wikipedia.org/wiki/Produced_water – which is not necessarily frack water.

    I’m pretty sure there isn’t a whole lot of Horizontal fracking going on here simply because the sediment is too folded and pre-fracked to work, the fracks that are being done are vertical. That was the reason for the big downgrade in resource after the big hype of a Fracking CA Miracle!

  18. Plantagenet on Fri, 10th Jul 2015 2:55 pm 

    @nrodent

    SO you are saying you said stupid things and intentionally made yourself look a fool again in the belief that his would upset me?

    Think again. I already know you are a dope.

    CHEERS!

  19. Plantagenet on Fri, 10th Jul 2015 3:09 pm 

    @POPS

    Thanks for posting more information confirming my point that the ongoing California oil biz does’t involve fracking shales.

    Hope you aren’t living now in one of the areas of California that had its residential water cut off. The good news is that its looking like a monster El Nino is building, and that may bring rain to California eventually.

    CHEERS!

  20. Davy on Fri, 10th Jul 2015 3:44 pm 

    Planter, can I give you some advice??? Change your avatar. That is something you could do that is easy to make yourself less irritating. I doubt you can change your brain waves so maybe changing your avatar would offer others here some relief.

  21. apneaman on Fri, 10th Jul 2015 4:51 pm 

    “isn’t a whole lot of Horizontal fracking” isn’t the same as zero or none or not any. Of course we have all, once a-fucking-gain gotten side tracked by cock sucker, fuck face, inbred, retard salad tosser, plant’s hair splitting word games and it’s trying to show off by bringing up minutia that has nothing to do with the issue this article was attempting to discuss and thus getting everyone off track. Good little disruptor.

  22. Northwest Resident on Fri, 10th Jul 2015 5:05 pm 

    Disruption is Plant’s intention. The avatar choice, the pompous stupidity, the purposeful ignorance, the rude name calling, the petty childish and immature twisting of names intended only to insult (i.e., “@nrodent”) — all point to one of the foulest pieces of garbage that ever existed. I used to find Plant repulsive. Now I’m merely amused by his grotesqueness. In my idle moments at work, occasionally I amuse myself by poking the ugly critter with a stick to watch him shit himself and puke out assorted vile playground-level tripe. Without Plant around, we’d have to find somebody else to stand in as the village idiot, I suppose.

  23. shortonoil on Fri, 10th Jul 2015 7:19 pm 

    “I hate to break it to you, short, but there is essentially NO shale drilling in California.”

    http://ftp.sourcewatch.org/index.php?title=California_and_fracking

    Looks like Venoco is still in business?

  24. Boat on Fri, 10th Jul 2015 8:00 pm 

    There is frigging fracking everywhere and much more to come with more production in spite of fewer wells. Those crazy Americans, they know how to do it.

  25. Rockman on Sat, 11th Jul 2015 10:23 am 

    Test

  26. penury on Sat, 11th Jul 2015 12:50 pm 

    Hey Rock, you passed,

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